第二章-概念框架优秀PPT.ppt

,单击此处编辑母版文本样式,第二级,第三级,第四级,第五级,w,*,单击此处编辑母版标题样式,Accounting English,Financial Accounting,桂林电子科技大学信科学院,唐风帆,(18877319004),1,Conceptual Framework,Conceptual Framework is a theoretical guide to the practical issues,which plays importance roles to the professional career.,2,Conceptual Framework,SFAC(Statements of Financial Accounting Concepts)issued by FASB,SFAC NO1:Objectives of Financial Reporting,SFAC NO2:Qualitative Characteristics of Accounting information,SFAC NO3:Elements of Financial Statements,SFAC NO4:Recognition and Measurement of Elements,3,SFAC 1:Objectives,Objectives:Decision Usefulness,(1)Useful to make investment and credit decisions,(2)Helpful to assess the amounts,timing and uncertainty of future cash flow,(3)About economic resources,the claims to those resources,and the changes of them,(assume a level of competence on the part of users),4,SFAC 2-First Qualitative Characteristics,Relevance(relevant to decision making),For information to be relevant,it needs,predictive value,or,feedback value,and presented on a,timely,basis.,Reliability(reliable information),Representational faithfulness,(information match what really existed),Verifiability,(provable to be true),Neutrality,(cannot select information to favor one over another),5,SFAC 2-Second Qualitative Characteristics,Comparability,measure and report the different companies in a similar manner,Consistency,A company can change methods,but it must first demonstrate that the newly adopted method is preferable to the old.,6,SFAC:Elements,Assets:,Probable future economic benefits obtained or controlled by a particular entity as a result of past transactions or events.,Claims to assets come from two sources:,Liabilities(outsider claims):,economic obligations payable to outsiders/creditors.,Owners equity(insider claims):,assets hold by the owners of business.,7,SFAC:Elements,Assets =Liabilities +Owners Equity,(Economic Resources)=(Claims to Economic Resources),Balance Sheet,(Statement of financial position):A snapshot of the companys financial position at a moment in time.,8,SFAC:Elements,Events,Assets,liabilities,Equity,Invest$50000 to start the business,Cash,+50000,Common Stock+500000,Purchase equipment on account,Equipment,+10000,Accounts payable,+10000,Payment of cash dividend,Cash,-4000,Retained Earnings,-40000,Buy some product,Inventory,+2000,Cash,-2000,9,SFAC:Elements,Revenue:,Increase in retained earnings from delivering goods or services to customer or clients.,Expense:,decrease in retained earnings that result from operations.,If Revenues Expenses,net income/earnings/profit,If Revenues Expenses,net loss,XXX earned net income of$870 million in 2012.,Income statement(statement of Earnings),10,SFAC:Elements,Events,Assets,liabilities,Equity,Sold of product(cost of$800)at the price of$1000,Cash,+1000,Inventory,-800,Retained Earnings,+200,Cash,+1000,Revenue_sales revenue,+1000,Inventory,-800,Expense_cost of sold,+800,11,SFAC 4-Recognition Principles,Historical Cost Principle,report most assets and liabilities on the basis of acquisition price(historical cost)which equals fair value.In subsequent periods,historical cost(reliable)and fair value(relevant)often diverge.,Revenue Recognition Principle,Revenue recognition generally occurs when realized/realizable or eared.,Realized:exchanged the products/services,Realizable:Assets are readily convertible into cash,Earned:Substantial accomplishment of production process,12,SFAC 4-Recognition Principles,Matching Principle,Expenses be matched with revenues whenever it is reasonable and practicable to do so.,Full Disclosure Principle,Disclose fully and completely all relevant data with the sufficient importance to influence the judgment.,13,SFAC 4-Basic Assumptions,Economic Entity Assumption,Separate owners and managers from company,Separate subsidiary company from parent company,Going Concern Assumption,Assume the company will have a long life.,Depreciation and amortization policies are justifiable and appropriate only if we assume some permanence to the company.,14,SFAC 4-Basic Assumptions,Monetary Unit Assumption,Money is the common basis for all accounting measurement.(The monetary unit is relevantsimpleuniversally understandableuseful),Periodicity Assumption,The periodicity assumption implies that a company can divide its economic into artificial time periods(monthlyquarterly yearly),15,SFAC 4-Constraints,Cost-Benefit Relationship,Information is not free.The benefits of using information must surpass the cost of providing information.,16,SFAC 4-Constraints,Materiality,An item is,material,if its inclusion or omission would influence or change the judgment,otherwise immaterial.,1.relative size(quantitative factors),In practice,anything under 5%of net income is considered immaterial.,COMPANY A,COMPANY B,Income from operation,$1,000,000,$10,000,Unusual gain,$20,000,$5,000,Only company A can merge the unusual gain with the operation gain.,17,SFAC 4-Constraints,Materiality,An item is,material,if its inclusion or omission would influence or change the judgment,otherwise immaterial.,(1)Relative size(quantitative factors),In practice,anything under 5%of net income is considered immaterial.,(2)Importance(qualitative factors),Such a bride case or lawsuit,(3)Separate or aggregate effect,Such as one subsidiaries gain$2 billion,another loss$1.5 billion,18,SFAC 4-Constraints,Industry Practices,Some peculiar business requires departure from basic theory in certain cases,such a agricultural companies,public-utility companies.,Conservatism,When in doubt,choose the solution that will be least likely to overstate assets and income.,Lower-of cost-or-market approach in valuing inventories.,19,Conceptual Framework,For each item blow,indicate which category of elements it belongs to.,Retained Earnings,Sales,Inventory,Depreciation,Loss on sale of equipment,Interest payable,Dividends,Gain of sale of investment,20,Conceptual Framework,Identify which basic assumption of accounting is best described in each item below.,The economic activities of,FedEx Corporation,are divided into 12-month periods for the purpose of issuing annual reports.,Solectron Corporation,does not adjust amounts in its financial statements for the effects of inflation.,Walgreen Co,.reports current and noncurrent classifications in its balance sheet.,The economic activities of,General Electric,and its subsidiaries are merged for accounting purposes.,21,Conceptual Framework,Identify which basic principle of accounting is best described in each item below.,Norfolk,reports revenue when it is eared instead of cash collected.,Yahoo,recognizes depreciation for a machine over 2-year period during which that machine is used.,Oracle,reports information about pending lawsuits in the notes.,Eastman,reports land at the amount paid to acquired it,even though the estimated fair market value is greater.,22,Conceptual Framework,What accounting constraints are illustrated by the items below?,Zip Farms,reports agricultural crops on its balance sheet at market value.,Crimson,does not accrue a contingent lawsuit gain of$6000.,Wildcat,does not disclose any information in notes to the financial statements unless the value of the information to users exceeds the expense of gathering it.,Sun Devil,expenses the cost of wastebaskets in the year they are acquired.,23,Conceptual Framework,Discuss the appropriateness of the following entry?,An order for$61500 has received from a customer.This order was shipped on January 9,2013.The company made the following entry in 2012.So following entry is made:,Accounts Receivable$61500,Sales$61500,24,Conceptual Framework,Discuss the appropriateness of the following entry?,The president of,Fresh Horse,used his expense account to purchase a new car solely for personal use.So following entry is made:,Miscellaneous Expense$29000,Cash$29000,25,Conceptual Framework,Discuss the appropriateness of the following entry?,Because of a fire sale,equipment obviously worth$20000 was acquired at a cost of$155000.So following entry is made:,Equipment$20000,Cash$155000,Revenue$45000,26,Conceptual Framework,Discuss the appropriateness of the following entry?,Materials were purchased on January 1,2006 for$122000.On December 31,2006,the materials would have cost$141000.So following entry is made:,Inventory$21000,Gain on inventories$21000,27,